Hong Kong puts out all the stops in an effort to overtake Singapore and Dubai regarding crypto’s mainstreamness and become Asia’s most prominent digital money hub and an international financial center. On its way to becoming a regional cryptocurrency hub, the Hong Kong Securities and Futures Commission has finally greenlighted retail asset management services trading in exchange-traded funds (ETFs) for Bitcoin and Ethereum. Now, crypto enthusiasts may be coming across a new supply option on their way to finding where to purchase Ethereum and Bitcoin from.
Moreover, the administrative region of the PRC works on issuing spot BTC and ETH ETFs accompanied by OSL and BOCI International, the former of which will be the first transacting and sub-custody collaborator of virtual assets for China Asset Management. Representatives at OSL emphasized the attribute of the debuting digital “asset trading and sub-custodian” collaborator of the leading Chinese asset management company for the impending spot ETFs.
The weighty news emerges amidst a dire economic situation in the crypto market owing to the Middle East conflict, which led to a loss of 10% of Bitcoin’s previous value of over $70K. Shortly after the price diminishment, Bitcoin swiftly reentered its ascending path, birthing hopes in a rally that will eventually send it to a whopping $84.5K, according to experts from CoinCodex, a live crypto price tracker of over 3K coins.
The waters in the crypto sea are anything but calm, so what can investors expect from the forthcoming months? How could the mainland’s greenlit assets impact the broader crypto market, considering that U.S. approval of Bitcoin ETFs brought about price gains of over $20K?
Finally, mainland traders could benefit from more crypto exposure.
China’s regulatory system is unique, prohibiting trading in digital assets like Bitcoin and Co. However, firms with links in Hong Kong can actively engage in crypto trading in the flourishing region. Retail investors can buy and trade crypto on the mainland, for they’re managed as digital currency and virtual commodities. Yet, asset managers and the latest optimistic news point to a possible legalization of the assets. So, traders may live to see the days when buying goods and services with Bitcoin or Ethereum becomes a viable solution.
Hong Kong Chinese investors may inject $25BN in the upcoming ETFs helped by a Stock Connect program, giving investors the right to use eligible mainland-listed shares. The recent approval of BTC spot ETFs could draw billions of dollars in capital as a result of investors’ newfound access to the program, concluding in transactions equivalated as high as $70 billion per year. The program enables mainland Chinese investors to secure Chinese stock’s worth of fortunes per year.
Furthermore, the scenery change in Hong Kong is expected to pave the path towards lawful trading of BTC and ETH after the Chinese capital prohibited virtual asset trading three years ago. According to the SFT’s 2023 statements, applications for spot BTC ETFs were accepted leading up to the year’s final, sparking massive excitement within the mainland’s crypto community.
Hong Kong’s Competition with Dubai and Singapore Upped
One of the largest financial hubs worldwide, Singapore, may have taken a hit after the downfall of notable crypto businesses in 2022. Still, it slowly rose from the ashes and gained new momentum. On the other hand, together with the likes of Dubai, they make a powerful example of markets that facilitate the healthy development of digital assets, the latter of which strives to become a digital financial hub. Palpably, Dubai’s intent of hosting over 1K metaverse and blockchain firms reflects the country’s continued strides to seize this title.
Owing to the latest Hong Kong milestone, the region is now competing with Dubai and Singapore to secure the reputation of a hub for digital asset companies, all the more after it rolled out a series of regulations to oversee providers of digital asset services back in June of last year.
Moreover, the current steps toward legal crypto embracement could unlock billions of dollars for Hong Kong, laying the groundwork for more crypto products that don’t enjoy the same level of approbation in the U.S. or other jurisdictions. All of these strides propel Hong Kong higher at the top of financial innovation drivers. With China’s rising attraction toward alternative assets such as gold, a renewed appetite for crypto exposure could naturally follow.
U.S. Established Precedents
Hong Kong’s ETF rollout emerged three months after U.S.-based ETFs debuted, which laid the groundwork for other innovation-oriented regions to follow suit. As $12BN has already been poured into Bitcoin-fueled assets and driven unparalleled price inflations down the road; a similar boosting effect is now expected concerning Ethereum and Bitcoin prices in the near future.
Bitcoin has risen significantly to seize new ATHs after the U.S. SEC permitted asset managers to offer spot ETF trading services. These frenzied investments empower investors who want to leverage the lucrative side of crypto without spending the necessary time learning all its ins and outs. Furthermore, they’re saved some trouble as the risk to crypto’s natively wild value fluctuations is slashed.
Asset management examples such as BlackRock and VanEck track asset prices and offer investors the potential to grow their revenue through indirect investments since the products entered the legal area in January of this year. Now, the burning questions regarding the ETF situation in the U.S. boil down to Ethereum and whether the asset may enjoy the same treatment through ETF regulation.
Eleven apps for Bitcoin ETFs were approved, and now applicants wait for a similar scenery unfolding for Ethereum.
Still, the regulator’s commentaries regarding ETFs are limited
According to Bosera Asset Management International, one of the most powerful impacts of the debut of spot Bitcoin and Ethereum ETFs is the mainland’s reinforcement as a global financial center and digital asset hub. While these achievements are crystal clear, the regulator leaves investors guessing how the new asset trading means will unfold later on.
It’s somewhat early to conclude the future of these assets, even if analysts and experts discuss the positive impact on the Bitcoin and Ethereum selling prices. A fresh Bitcoin ATH price isn’t excluded, so investors now have a lot of food for thought on their plates, pondering whether the bargain listing prices are calling for portfolio makeovers.
The only way to remain updated on the crypto market’s situation is to monitor the critical following days, so stay close!
